Monday, August 27, 2007

FTTH keeps moving ahead in August

Returning from a long holiday period, I want to summarize the big news of August, with a T.I.M. (telecom internet media) twist.

The local Metro free daily reports on Reggefiber. This Dik Wessels (a Dutch billionaire who made his money in the construction sector, as well as by being part of World Online when it went public) vehicle builds out in the Netherlands. The costs are EUR 1000 for passing and EUR 300-400 for connecting a home. Reggefiber intends to add 150k connections a year, or 50% of the nations total FTTH connections.

Other new deployments were planned in Barcelona (Spain), Mauritius, Hawaii, Canberra (Australia), Chattanooga (Tennessee) and Iowa, Dundas (Minnesota?) and South Africa. Again, lots of activity in the US, as well as another utility (EPB in Chattanooga) joining. Who has additional English language information on Adamo Europe (the one doing Barcelona)?

Also, Telekom Slovenija detailed its plans (still among very few PTTs/ILECs), devoting EUR 450m.

Finally, PacketFront has acquired DynamicCity, operating the UTOPIA network in Utah (that looks like an interesting deal!).

2. Third Pipe
KPN is testing both WiMAX (with Samsung) and HSPA (with Ericsson) for rural access. This is a fixed (DSL) replacement service first of all, so don't count WiMAX out just yet. In fact, it could be clever from the point of view of traffic unloading: mobile networks are much more capacity constrained than fixed networks, to it could be wise to dedicate HSPA to mobile wireless access.

Further, Sprint detailed its WiMAX plans ('Xohm'), very much a mobile offering. But then, they have CDMA and Nextel for 'offloading' voice and P2T.

Finally, DirecTV enters the BPL market by teaming with Current Group (Google and Hearst hold a stake). Its coverage area is very limited, so DirecTV will still need to team with others.

3. Consolidation
The KPN takeover of Tele2/Versatel Belgium lead to some interesting (albeit obvious) conclusions: KPN is serious about Belgium, but a Belgacom merger will not happen; the same strategy will likely be followed in Germany, perhaps involving Versatel Germany (no longer related to Tele2/Versatel); after that, who knows what - France ?

4. Credit crunch
Over at Wolters Kluwer, $12m in sales is affected. A small acquisition can be seen as mitigating this.

McGraw-Hill and Moody's are bleeding.

Saturday, August 18, 2007

Google's Grand Plan

Between Holidays

Just returned from two weeks of well-deserved (?) vacation, and only a single (totally?) unoriginal thought on my mind. It concerns Google's Grand Plan.

I'm off again for the whole of next week. Come and meet me in New York. I will be at the Hilton on 6th Avenue.

Robert Cringely almost a year ago stirred the Internet community when he suggested that Google was building an Internet of its own. This was based on Google's efforts at building infrastructure, ranging from dark fiber to servers (and beyond).

It occured to me, as it must have to many others, that this GoogleNet could be where Google is heading in the long term. However, it would have very little to do with infrastructure.

So far, Google = search + ads + apps. Google's share of search is on the rise, the ads market is nowhere near saturation and Google keeps delivering news apps. Each time they do turn out a new app, they maintain that it must first serve the people, and monetisation will follow in due course.

Everybody nows that the seismic shift of ad dollars will one day end, and the Internet ads market will prove to be as cyclical as any other ads market. My theory is that Google is planning a new business model for when that happens. They will start charging for an ad-free Internet.

A new generation is growing up on the Internet, learning that information is free, as long as you agree to be served ads everywhere. Ads are not just taken for granted - they are increasingly seen as useful information (compare email services like Daily Candy or Thrillist, with huge CPMs).

However, when the dust settles an ad-free Internet will become attractive again. It may take a while as the Content = King theorem seems to be out of fashion. But one day ...

Anyway, by that time, Google will have the power to serve an ad-free Internet - for a fee. It will have all the apps, and no content. So, it can share the fees with the content owners, just like it can share ad revenues on YouTube with content owners.

Back late August!

Thursday, August 02, 2007

Kabel-X: Copper-to-fiber with limited digging

Take a look at this: FTTH made cheap & easy. Kabel-X touts 'Copper to Fibre without excavation'. Taking excavation (or really: replacing it with some other labour) out of the equation will "save your business up to 200,000 euros per kilometre compared to conventional digging".
Besides, the copper can be sold at 20-30 $/meter and will no longer attract individuals with unhealthy intentions.
Kabel-X already has a long list of customers: Deutsche Telekom, BT, KPN, Swisscom, Telekom Austria, O2, UPC, Elisa. I am not sure if the cost advantages are already incorporated in the FTTH business plan calculations these operators no doubt all have done. So far, they all maintain that the business case is not viable, but the lack of support from investors seems to be the true reason why FTTH is not yet widespread.

Any way, if the technology really works, it could have far reaching consequenses, but I see a couple of limitations.

First, fiber may not necessarily be put in the ground at the exact same location where the old copper is. This is especially true when it comes to connecting street cabinets to MDF locations. A valued reader recently asked me how KPN works at this, since it is moving from LLU/ADSL to FTTN/SLU/VDSL for its All-IP network. KPN confirmed that in many cases the copper stays in the ground for this reason (at least until it needs to be removed for regulatory reasons).

Second, when it comes to the last mile (FTTH, esp. active ethernet for point-to-point), regulation has to be in place - one way (no sharing, as is the case in the US) or the other (open access seems to be here to stay in Europe). GPON architecture (point-to-multipoint) may run across a completely different route than the existing copper network.

Third, Verizon (FiOS) attracts a some criticism for ripping out copper wiring in the last few feet (but this doesn't seem to be where the technology could be used - unless you have a really big place). A switch back to DSL is not possible, even if this seems more of a regulatory concern than something anybody would really want (customer satisfaction over FiOS is very high).